The caretaker government swings in to save the day yet again. While I agree that our government SHOULD be funding US automakers efforts to develop new technologies to free us from the shackles of foreign oil, this just smells like the beginning of a bail out. Throwing money at the "Detroit Three" is just rewarding them for pursuing a bad business model for the last decade. They built their businesses around the idea that large trucks and SUVs would be the golden cash cow because people were willing to pay for the insanely marked up prices of those vehicles. And now that the free ride is over the government will bail them out to help protect the jobs those companies provide.
Some people make the argument that the automakers never could have anticipated this kind of oil price spike.....bullshit. These same companies were caught with their pants down in 1973 when the OPEC Oil Embargo happened and sales plummeted. Then again they were caught unawares by the 1979 oil shortage caused by the fail of the Shah regime in Iran. Too long ago you say? After Katrina, gas prices spiked and everyone thought it was the end of the world, the automakers should have taken immediate heed of that little warning. If they had acted then they would have had nearly a two year jump on fuel effecient products (the average price has doubled since the post Katrina gas price bump receeded).
The real failure is our government. If they had not relented to automaker pressure in the late 80's and continued to enforce (or improve) the CAFE standards we would be much better off now. Automakers used the "looseness" of CAFE to continue making highly inefficient SUVs and large trucks. They CHOSE to do that and they are now paying the price.....
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I seem to remember reading that the Japanese govt helped toyota and maybe Honda develop their hybrid cars with millions of dollars in hidden funds. I would think that helped considerably to keep the cost of their hybrid cars down. If the japanese can subsidize their auto industry, why not the american govt? I know your article was dealing more with debt bailout but I see this as along the same line.
You're right, I blogged about that back in April. I've got no problem with the Government giving them cash incentives to develop the technology but from what I've seen on the 'net most of the American companies are going to buy developed tech from the Japanese and end up pocketing this money.
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